According to MBSB Investment Bank Bhd (MBSB Research), the results were within expectations as it accounted for 21 per cent and 20 per cent of theirs and consensus full-year estimates.

KUCHING (Feb 27): Oriental Kopi Holdings Bhd (Oriental Kopi) has kicked off its financial year 2026 (FY26) with a bang as its earnings surged 26.2 per cent on continued café expansion and robust packaged goods sales, which helped to offset higher operating and input costs that pressured margins.

For the group’s first quarter (1Q) of FY26 that ended Dec 31, 2025, Oriental Kopi posted a revenue of RM139.2 million, a 42.3 per cent year on year (y-o-y) and 4.5 per cent quarter on quarter (q-o-q) growth, while its core PATAMI grew by 26.2 per cent y-o-y and 7.3 per cent q-o-q to RM17 million.

According to MBSB Investment Bank Bhd (MBSB Research), the results were within expectations as it accounted for 21 per cent and 20 per cent of theirs and consensus full-year estimates.

As expected, no dividend was declared for the quarter under review.

The robust revenue growth was driven primarily by continued outlet expansion and stronger walk-in traffic across its café chain operations.

“Growth was further supported by a sharp acceleration in the distribution and retail of packaged goods segment, reflecting wider retail penetration and improved sell-through momentum. Sequential growth was underpinned by higher festive and year-end holiday traffic, alongside contributions from newly opened outlets, reinforcing topline resilience across both core segments,” said the analyst.

That said, the group’s core PATAMI growth narrowed due to margin compression as gross margin declined by 2.9 percentage points (ppt) y-o-y and 1.7 ppt q-o-q to 23 per cent. This was due to higher cost of sales and operating expenses associated with outlet expansion.

Segmentally, café chain gross margin eased to 21.2 per cent, while the packaged goods segment saw a sharper contraction to 42.3 per cent, reflecting higher input and distribution costs.

Looking ahead, MBSB Research guides that they expect Oreintal Kopi’s growth to remain anchored by its steady café network expansion and continued scaling of its packaged goods segment.

“. New outlet openings across key catchment areas should sustain revenue growth, supported by resilient domestic consumption and improving tourist traffic. While margin pressures from expansion and input costs may persist in the near term, broader retail penetration and ongoing efforts to expand distribution channels, including overseas markets, provide additional medium-term upside,” they shared.

While the results were within expectations, MBSB Research upgraded their call for Oriental Kopi to ‘neutral’ following recent share price corrections that push the group’s valuations to more reasonable levels.

Additionally, the analyst also upgraded their target price (TP) from RM1.03 to RM1.24, based on a revised 30-times FY26 forward price-to-earnings ratio (PER), which is in-line with a one-year forward PER and peer averages.

“This reflects a more balanced risk-reward profile at current levels,” said MBSB Research.

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